Adding ‘or 5k higher than top bid’ in best and finals

[KimGa]

We’re going into (another) best and finals on Monday. It’s on for 450. We’re planning to offer 531k because in our opinion it’s been undervalued, should be 500k so we are taking that and then adding another chunk to try and beat the competition as is required where we are.

We have been looking and offering for 6 months this is the best thing we’ve seen that’s in budget. 30 other people viewed. The figure we’ve decided on leaves us 28k to hopefully put in new kitchen and convert garage to office, both need doing in time though ideally sooner rather than later.

But maybe it still won’t be high enough. Another thread I saw on here ages ago mentioned putting your offer in followed by ‘or 5k higher than the value of the highest bid up to…’

Has anyone done this? Are you allowed? I feel like offering 81k over asking ought to be bonkers enough, but we are so desperate to get this one (we won’t get school catchment we want in time if we don’t) that I’m thinking about saying ‘531k or 5k higher than the value of the highest bid up to the value of 559k and forfeiting improvements budget necessary. But will the agents ignore it or take out offer as 559?

I know we’ll never know what others below us would have offered but even offering 531 could be massively overpaying. It’s so difficult to know.

Last time we lost nearby we put in 541 house was on at 495 we were the second highest bidder.

Is this in Scotland where advertised house prices appear to mean nothing?

Paying nearly £100k over asking in the current climate is madness.

I guess it depends on the rules where you are. We did, but we are in the USA. Our offer looked like an eBay bid along the lines of $X base offer raising in increments of $Y up to a ceiling price of $Z.
Still lost out on a lot of houses as price inflation was running ridiculously high in this area at the time. Can you ask the estate agent? The biggest difference here is that the buyer has their own agent (separate from the selling agent) to help you write your bid.
Good luck!!

Don't do that. It's not only contributing to the madness but creating it.

Do you need a mortgage? Lots of very high over bidding going on here which then subsequently results in lots of mortgage down valuing to no where near the offer price. Just something to consider.

Sorry but I think that is nuts. What is someone else bids your top budget? You can't beat their bid by £5k so it's pointless. Is there some other tactic you can use to avoid a bidding war?

Madness

I'm sorry, you're offering £81k over asking price 😳
Would you even get a mortgage for that as it'll be valued less for the mortgage company

Do you not need a mortgage? Are you cash buyers? Because the bank will laugh at your valuing the property at £81k over and give you a valuation that won’t be £531 or whatever

I think that's putting a lot of trust in the EA hands and I'm not sure I would do that! You say you're basing it being undervalued but would every other bidder do the same?

In addition to above, have you actually had quotes for the kitchen and conversion? We had a quote of over £16k for our bathroom.

I've never heard of it, but it does sound like an interesting option as long as your 'up to' is a price you're prepared to actually pay. If you do that though, you might as well put your starting bid a lot lower. No advantage to starting at £531 is there?

however, as others have said. It's all only going to work if you need a comparatively small mortgage. Otherwise the bank is likely to down value it.

I don't really trust the EA either though & id be concerned they take the 'up to' as my offer & id be concerned I'd paid more than if I'd just put in an offer.

however, there's NOTHING going in the market where I am, so if something came on, that was something I'd really like & in catchment, id definitely consider this as an
option (now), but be very careful what I put my 'up to' value as.

id imagine them phoning me to say I'd got it for £x - what my reaction would be 'yayyy', 'gulp' or 'oh fuck'. That'll tell me quite enough.

like you I've been following the local market closely (not much effort required right now!!) so I know what I'm prepared to pay for xyz house (type) & what I'm not.

also it depends how long you plan to stay, if it's a good while then it's less important how much you pay (as long as you can afford it (with the CoL taken into account)). Because overtime the market will sort itself out and you'll be living in a house that meets your needs.

best of luck, let us know how you get on!!

Of course it's not pointless! There's a whole band where this type of offer might win over a fixed offer, before you get to the top you're prepared to offer.

it's the same as putting in an online auction house or eBay top offer, except eBay/auction house is automated, here you have the added element of Estate Agents! (And the value obviously!!)

In Scotland it’s the Home report value that matters
20% over HRV is pretty standard in areas that are hot
The estate agents will not say how much the next offer was in case you drop your price
That would be a potential issue with your strategy but you should discuss with your solicitor first

Problem is the estate agent then knows you can and will pay 559. Possibly depending on the contract that’s more commission for them. You could well end up needlessly paying 559.

I don’t actually know if they’d pay any attention- whenever we’ve put offers in the forms generally specify that you have to name a price so to speak. They specifically say you cannot make reference to any other bids (ie X over highest offer). In practice I’m not entirely sure whether they do listen to their own advice- I suspect if you were a well known local cash buyer and they knew you were good for it then perhaps they’d allow it, but if you need a mortgage (and all the forms we’ve ever filled in for offers ask that you specify if this is the case, usually with some sort of evidence) then I don’t think they’d pay much attention to it. Bid what you can afford to pay and can get a mortgage for, if you get it then great, if not you move on.

Plus also for obvious reasons I 100% would not be trusting an estate agent being paid to literally extract your money in the largest quantities possible how much you can go up to. No matter how desperate I was.

Yes I do worry about the trusting the agent issue.

We need a 50% mortgage so if we got a down valuation we’d just had a worse LTV.

I know it is madness but it’s just the way it is in the place we really want to live. If we can’t get this one we’ll have to go into a rental for at least 12 months (because that’s what school admissions criteria dictates) which will massively eat into our equity because rental costs are double what our mortgage per month would be. And they’ll be no guarantee we’ll be able to buy somewhere we’re happy with at the end of that time.

We’re in SE England. The form we’ve got to complete doesn’t say you can’t reference other offers.

You are allowed to do it in England because when we sold my mums flat via “best & final bids” someone did exactly that. Our estate agent told us it’s a trick most often used by property developers. I seem to remember it was only 1k above the highest offer though.
We discounted this bid and went with the person who genuinely put in the highest figure so you do risk the vendors instinctively rejecting the offer because it’s underhand.

I don't know if will work with property but this is basically how eBay (should) work until you get all the nonsense about waiting until 10 seconds before the end by people who don't understand the system and somehow think that a late bid stops other people who bid higher but earlier than them from winning.

I think what you're suggesting is a great idea and reduces the risk of a later downvaluation if you decided to go all in at the beginning with £559k.

I live in SE England; Essex, a 'naive' bit that's popular with ex-Londoners with young families. The market here is starting to stagnate- you'd be mad to pay £81k over asking unless you're willing and able to write that money off for the school place. Personally I'd rather invest that money in private school!

Exactly, it is about writing it off for the sale of the school. Because private for 2 dcs for secondary for 5 years each would be 240k and they’d have to be ferried there every day rather than being able to walk themselves.

sake

That's just daft as you're not actually offering your best or final offer.

In addition imagine if someone else bidding did it, it would never end lol.

No because you're basically offering 559. Why would they take the lower offer! Offer what you want to, and then say 'or 5k over competing highest offer' without putting a ceiling on it. Then if you get a phone call saying it's 550k, you can accept that, or a phone call for 600, say no.